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tv   Fast Money  CNBC  February 29, 2016 5:00pm-6:01pm EST

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it's like you are going to write about things that are personal and when you're co-writing you're having one of the other co-writer's impression of that experience or theme, too. so hopefully it is personal. >> yeah. >> because you don't want it to be, you know, something that's just generic. >> rita, thanks so much for joining us. >> thanks for having me. >> the album, as they say, drops march 11. that does it for this show. "fast money" begins right now. thanks, kelly. "fast money" does start right now. live from the nasdaq market site overlooking new york city's sometimes square i'm melissa lele lee. tonight on "fast" you may think it's been a tough year on stock and the biggest bull on wall street say traders are missing something big for the rally and tells us why he thinks stocks could hit new all-time highs and in honor of leap year, the stock you can own for the next four years and a top technician says one group of stocks has entered a so-called kill zone.
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he'll tell us what they are and why you need to be hitting the sell button right now. first we start off with the markets. february in the books and with today's close the s&p is off to its worst start since 2009. also just posted its third consecutive monthly loss. this is the first time that has happened since 2011. so is the mini rally over? will we see more pain ahead? b.k., i'm going to start it off with you. >> i actually think so. we all talked about 1950 being a big level. look like that's been rejected so technically it sets up that it will have a tough time going higher. meantime, we did have a little bit of hope in the middle of the month that things might be turning around economically, but since then we've gotten data points and global pmis that have turned down again and as i look out over the next couple of months market heads lower and i stick with my 1620 target on that and we still hit that. >> in an environment where oil has stabilized. iran had elections yesterday where there were two extremely
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moderate guys which come out which says full steam ahead for getting irany back on market and eye healedis bouncing and places where small-catch stocks are outperforming and credit looks better. we're in an environment where the overreaction of the first two, three weeks of the year. china cuts rates last night, not because things are a mess but because they can. >> that's not stimulative what china did. >> china said to us a month ago they wouldn't cut rates because they thought that would exacerbate capital flows and what they want to say what's happening is not comfortable. china is in a much better place. >> in a lot worse place since the beginning of february. we'll find out tonight. numbers coming out on china but the data os china has gotten worse over february. >> how are you feeling, beginning of the year or now? better or worse? >> in some ways better, some ways worse just to give you a hedge fund and, you know, i think that i'm a little more optimistic on the u.s. economy and a lot of the retail stocks, for example, are very u.s.
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centric and the consumers are in great shape and i like those. i was much more hopeful about the banks going into the year. i thought we would see the likelihood of rate increases, maybe a couple. that definitely seems less likely, and i'm actually optimistic that europe will start to gain some momentum so i'm a little more optimistic. >> a couple of things. high yield, hyg. above 80 for the first time in a while. up about a percent and the ovx continues to sell is off unchanged on the day to day but that should be an encouraging sign and i've got to tell you when the s&p was trading up towards 1960 today given all the fact tors should have continued to ratchet up. i'm not going make a big deal out of one day. saw where it closed today. i still think 1950 is the battleground and to karen's point and i'm not trying to hedge myself. a lot of good things and an equal amount of things that were a bit concerning as well. >> note inflows into hyg. $2.6-3-billion according to merrill lynch punksated by last
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week's net inflows. is anybody surprised how oil equities didn't get a bid today given the strength in wti? >> best of breed, eog numbers out late last week that were frankly a little disappointing and this is one of the best names out there. you get to a place where the stocks have had a very good run. markets have had a very good run. no way markets are going to go administration higher and look at the russell which, again, is the tell for credit and for the highest volatility index out there, and it was almost at a 70 relative strength indicator. what does that mean, nokes at home. getting to a place on a short-term basis things went from very oversold to almost overbought. they don't go straight higher. that's what markets are doing today? >> but we've had three good weeks and some -- i mean, i wouldn't even call all the signs you're saying positive signs. inflows into high yield and have inflows all the time, second half of the month. things come in, but when you look -- those are past indicators. when i'm looking forward, i'm looking at things that just
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don't look that great. earnings haven't been that great. pmis aren't that great. >> 1680, 1620. >> yeah. >> you're not talking about things looking not that great. saying things are looking horrendous. >> terrible. >> when you're saying what i'm saying markets have a lot of stuff to work through, a lot of volatility. >> okay. >> i love these. >> here's what i want to know. anybody buying anything, selling anything today in. >> going to talk about gold later. got to absolutely stay with that, and i think the bond market will continue to rally. not a big day today either way for the tlt. bond rallies and gold continues to real. >> karen? >> well, i didn't sell any. that's up and i wouldn't sell any here. there's a lot left to play out in that story so to me that's similar to buying more. >> right. >> well, sticking with long gold tlt and in terms of the sells i think you sell financials here. for me the things i'm short are a couple different areas, frc, first republic, asset managers,
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blackrock, sell those as well. >> position the high-momentum stocks which are things that were actually the most hurt in the last round on the way down. high momentum tech names, high momentum or high multiple even retail names or consumer none discretion. under armour and netflix, the names that were most hurt. if you think what b.k. is saying is half right, names that will get hurt on the way down. biotech, stay clear. >> the s&p has bounced more than 7% off its recent low but could it be in store for another selloff? take a look at the s&p chart in january as well as february. it sold off to a low around 1810 to bounce back and sell off in the beginning of february. should investors brace themselves for a similar fate heading into march? let's go running with the bulls with fund strategist tom lee. >> hi. >> your forecast for the s&p 50? >> 2325.
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>> another 5%. >> what does that path look like from here because there's a lot of path to cover? >> at the start of the year the market was 5% higher so, you might say if the market is 5% lower now should everyone cut their price targets 5% and first i think that's a pretty small deviation. in other words, i don't think things have change that had much in terms of the start of the year in terms of what the market can do for the next ten months. on the margin there's a lot of puts and takes, but the tone is really different. i think in january and february for most of the month it was universally negative. things were just getting worse and worse and in the last few weeks things have really changed. >> first two months. year, who has gone the most wrong in your model? i mean, which sectors have really surprised you to the downside that's sort of, you know, making that gap that we have right now. >> from an earnings perspective it's very easy to see. energy earnings are much worse in the first half of this year than we thought at start of the
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year and that's because oil has dropped a lot and there's a little more risk now on financial earnings because activity has been weaker and the curves are flattening so i think those are the two areas where you now have to think can the market anticipate and make it up on the valuation or, you know, do things actually have to improve there? >> with that area, would financials be a lagard in your 2325? what has to happen -- does what need to happen support financials? >> well, right now i think financials are really torn because negative rates isn't something that people want to be enthusiastic for banks about, but if inflation is picking up, it's really bullish for financials, so i think you need to watch both developments carefully, and i think in the u.s., i think the inflation story is going to actually become more prominent, and it should mean we've got a big rebound in financials later this year. >> i consider myself probably more constructive than most of these people on the desk. having said that, i don't know how you get to a place where earnings multiples are justified. i mean, we are in a place where
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the recession across earnings over the last three to four quarters tells you that the trend is certainly not working in your favor and that these companies could be expensive so you get a correction, not a disaster but a correction. >> 100%. i agree. if we had to say in february nothing ever changes from here, the market is not going to recover. but i think one of the keys here is that investors are going to start to think of this year as normalized earnings versus distorted earnings. you know, dollars are a huge distortion. last year it rose 20%, crushed all these multi-nationals, dollars flat year over year and think about energy. not going to value energy at a penny per share because earnings are getting killed by oil. you want to think of where the present value of oil is. when you think of normalized earnings i think investors think more of 125 this year and make in the 130s and, therefore, you can put a higher multiple in next year's earnings and get to something well above 2000 on the
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s&p. >> new highs on the s&p 500 which you're forecasting by may. >> around may, right. >> okay. let's just say may give or take a month. may is this year. >> what are the levers? what specifically gets us there? is it a change in market psychology, something fundamental in the markets? >> melissa, all of the above. one, let's just think -- >> that's a tall order. >> let's think about some key drivers, you know, high yield, as you all mentioned, it's really actsing different. i think it was on its way to pricing a recession. it's priced in something pretty severe and starting to recover. oil is flattening. the dollar is no longer going up 20% a year, so that's really bullish for sort of risky asset views. look at positioning. i mean, sentiment got the worst. you have to go back to '09 and short interest rose at the largest increase since 2009, so we know that markets are completely offside right now and you can think about valuation if you like and the dividend yield
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2.4% versus 1.7 on the ten-year, so i think the market is giving you a pretty good risk reward, and i can tell you in the last ten days our clients have completely changed their view. they are very interesting in looking at what's gotten killed and what's priced into a recession and realize the levels are interesting. >> they are ready to buy is what you're saying. >> but they are not buying right now because -- >> what's priced in recession? >> what's that? >> what's priced in recession? >> when you think about the fact that, for instance, so many stocks are down 20% and high yield priced in something pretty severe. i'm not sure what that means. >> tom lee, thanks for stopping by. first in a series of running with the bulls. flat in terms of the dollar and sentiment swinging the other way. is that enough? >> tim's mentioned this. is transport side, it's up 20% since january 20th. that's a good sign because that's what led us down starting in november 2015.
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the flip side though is global interest rates continue to go lower and this gold market which, again, we'll talk about is stubbornly bid so i think -- >> but if you like gold, and you have a right to like gold and i actually kind of like gold because you have to believe the dollar is going lower, and all of these trades that were inverse dollar trades were dead. >> no, no, no. look, first of all, the dollar is getting stronger recently, and what's going to happen this week? we have flat-out deflation in europe. mario draghi has already told you he'll print as many euros as humanly possible. that's going to drive the euro much lower and the dollar much higher so the assumption that the dollar stays flat is a non-starter. >> what about the job market on friday? >> doesn't matter. >> weak payroll numbers, goes up? >> it might. >> you shay the fed is trapped in a corner. if anything the dollar should be weakening because the u.s. economy >> but it's not because the euro, they are printing more
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euros there and let's remember now we also have this -- >> we've got to break away. but what's interesting for two guys on opposite ends in terms of market views you both like gold. i think that's an issue take away. >> always -- speaking of gold, something it hasn't done in four years could signal even more gains ahead. we'll explain and the oracle of omaha says he's almost always a buyer of stocks but would you buy some of the names in his portfolio in the traders weigh in on which stocks look most attractive and valeant shares are tanking as the company confirms it's under investigation by the s.e.c. all the details in this developing story and the very suspicious trading that's been going on in the name when "fast money" returns.
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man 1: i came as fast as i man 2: this isn't public yet. man 1: what isn't? man 2: we've been attacked. man 1: the network? man 2: shhhh. man 1: when did this happen? man 2: over the last six months. man 1: how did we miss it? man 2: we caught it, just not in time. man 1: who? how? man 2: not sure, probably off-shore, foreign, pros. man 1: what did they get? man 2: what didn't they get. man 1: i need to call mike...
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man 2: don't use your phone. it's not just security, it's defense. bae systems. welcome back to "fast money." retail is surprising bright spot in the market and kicking off our top trades with the mall stocks leading the charge. jc penney and nordstrom and gap, just a few standout performers and the ceo of jc penney
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speaking to "power lunch" in his very first tv interview about his company's turnaround efforts. take a listen. >> we'll open 60 more safari locations inside jc penney and redesign the center court area of a third of our stores, fashion jewelry, sunglass eds, accessories, very high margin, very hoy traffic area so one-third of our stores will get that upgrade. and we'll have pick up in same store and one of the few retailers in america that can't do that today and the upside potential is enormous. >> so, karen, any thoughts on jc penney here? do you like the stock given its run? >> i think the sephora thing is good and i how he liked turning the negative of we don't have the ability to buy online pickup and store and that's great because now they can. i guess that's good. they are really taking significant share from sears which just seems to be disintegrating at, i don't know, so slow of a pace. it's expensive for me.
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i like macy's bert, but they do seem to be doing a good job here. macy to me is more attractively priced. >> after that interview we spoke to a retail consultant and said he believed jc penney was gaining share from macy's. >> it's close to 24, 25 times forward earnings. i mean, jc penney is not a cheap stock, run from 6 and trading 10 bucks now. monster short interest which a lot of folks are probably covered so to buy it here i think you're betting it's a coin flip at best. i think macy is given a run from 35 is interesting. >> more broadly speaking, a sign that the consumer truly is on track. we're finally seeing the results. >> you know, certain parts of the consumer sentiment are doing well but this is a story where there are broken companies and in the case of jc penney where they are getting their act right. looking across the consumer. to say that the consumer is dead and to say that the lower energy
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priced environment has done nothing is to not say it and to acknowledge structural changes which is hurting some people more than others is what it's all about. >> is there a place in retail you like? >> i like jc penney at 8 bucks, that would be your drop. look what's happening. the market tells you that it likes what's going the two-year base building between $6 and $10 and the way i would trade this, wait for a pullback to 8 bucks and see if we get strength there and then you buy it and then the market is telling you it won't be that expenseive. >> guy, top retail pick? >> macy's, held in really well. whatever earnings announcement they gave. >> valeant says it's under investigation by the s.e.c. and the stock is tanking. the latest on this developing story and the names of some of the top hedge funds feeling the most pain right now. i'm melissa low and you're watching "fast money" on cnbc, first in business worldwide. moantime, here what else is
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coming up on "fast." like sands through the hour glass so are the days of our lives and with today being a leap day our traders have four stocks you can own for the next four years. they will explain. plus, starbucks moving into italy for the first time, but in order to succeed the original italian guy adami says they need to do one thing, and he'll explain what that is when "fast money" returns.
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welcome back to "fast money." shares of valeant plunging more than 18% after the company revealed it's under investigation by the s.e.c. this as ceo michael pearson returns from medical leaves and cancels the company's fourth-quarter earnings report. valeant investors feeling the pain. bill ackman's pershing square lost $280 million and paulson lost 175 million. meg is here with the latest. what's the take on this s.e.c. investigation? is this sort of a follow-up of the restatement of things they said they were already going to do? >> analysts said this was probably expected given all the news, all the accounting
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questions and things like that. that really nobody should be surprised that the s.e.c. is looking into this. of course, they were already under investigation by several sources, the southern district of new york, congress, another s.e.c. investigation into something else before this, and so this is yet another one that came out earlier today and really started to surprise people and make them even more nervous. really a good day for valeant and announced that mike pearson was coming back and that should have assuageled a lot of fears saying it's okay to get back on an even keel and all of the news that followed after that made it worse and worse and worse. >> and even on the news that michael pearson was coming back the stock was trading down and concerns about allergen launching a bowel drug and there are fundamental concerns about the company's pipeline. >> definitely. you mention the the patent challenge, something we haven't talked as much about today. this drug zifaxin, supposed to
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be protected into the 2020s and allergen is challenging that. most say it will be protected into the 2020s but it's another overhang on the stock and the reason the stock was down today, even on announcing pearson's return is they withdrew their guidance and they weren't going to report their earnings today which they said they had and then they would hold a call with analysts and once the media caught word they said they weren't going to hold the call with the analysts so they are trying to establish good footing and not doing a very good job of this. >> isn't it natural that pearson has been away for an extended period and earnings to announce that they would want to take some time and it could be just that and they don't want to say the wrong thing and it's not a conspiracy. >> it's natural. >> that's the take. all of it looks like that. it korb -- he just wants to get his footing and wants to figure it out before they issue the 10k and the call and all of these things start to compound and haven't mentioned that moody's
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is reviewing their debt rating and all of the things on the first day back. i don't even know how to put it. >> thanks for following the story for us. meg tirrell, welcome back, good to have you back on a day like today. what's your take. you're an expert at detecting kitchen sink sinkiness. >> this does seem to be overdone to me on the latest news, just the narrow s.e.c. thing. you know, i think you have a lot of speculators in here thinking, wow, the stock used to be 250. now that's 75 or where it was earlier in the day. 76. you know. i jumped in for a pop. not there. s.e.c., i hate those words and those letters and i'm just going to bail out. i think the reat the same time, if it's as narrow as it seems to be, that would be really, really positive for them. if i had to do something, i would jump into it now, but it -- it's -- i couldn't justify it. i would feel like, you know what, if it goes up five bucks tomorrow and i own none, that's fine. there's more to come, but this isn't that bad. it's not criminal, not that they
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can't be in the future but at the moment it's -- it's crazy though. >> on february 22nd, real quick, the stock closed at 75. that's when they said they were restating 2014 earnings. we did the show after market and it's trading 69. next day that stock was trading 84. i would submit this is where it should have been all along so obviously the move from 83 down to 67 is staggering, but the move to the upside in the first place sort of was interesting to me. it didn't make a lot of sense. is it a kitchen sink? volume says it's not yet. i still think you say away. >> anybody take a flier on this one? tim you were in the stock? >> on protected downside with the risk and as we've entered into the phase with the company before pearson checked out and before you had the setup for all this. i think it gets back -- i would focus more on biotech as being not the time. >> breaking news here on apple. let's get to seema mody in the newsroom. >> as we watch for further updates in the apple versus fbi dispute, there are a number of
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other cases that apple is involved in including a new york drug case, and the judge in new york of that case has said that the u.s. cannot force apple to provide the fbi access to the locked iphone data, referencing the all writs act of 1782 that don't allow the government to force apple to unlock the phone. of course, this following a similar dispute the government is having over access to the san bernardino shooter's phone and that's an update on the second case involving in drug case in new york. melissa for now, back for you. >> thanks so much, seema mody. not sure what kind of precedent, if any, this could probably set given that this is a lower court theoretically that would hear this. >> if the government is making the case it's this one phone and this other phone in brooklyn. >> and there's another phone. >> maybe the specifics are very, very different but they should really focus on the one.
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>> one terrorist phone. >> seems like an easier sell. >> >> but maybe it's different circumstances, i don't know. >> it seems -- it seems as though this would not take precedent. different jurisdiction. similar case objectionly, but i still think you have to -- in terms of a israel, again, i still think that this is not going to hurt apple sales but that's my opinion. >> agreed. >> in a rising market, tim, since you're the quote, unquote, relative bull on this desk, does apple go higher in a rise market, or is it the momentum stocks that you like, like the netflixes of the world? >> i -- i don't like netflix at all in this market and i think apple for all the overriding headline, you know, noise, the stock isn't doing anything. ultimately a case where apple's fundamentals are based upon seven and what's going on with the company, not expensive and what are they going to do with the offshore capital? can you own apple, absolutely. high div stock, i would own it. >> won group of stocks has entered what he's calling the kill zone. we'll tell what you they are and what it can mean for the market.
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later, starbucks is going where no starbucks has gone before, italy. >> that's nice. >> and will the locals love the coffee. we find a very scientific way to answer that question. we'll answer right after the break. stay tune the. we built our facte
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welcome back to "fast money." the dow falling triple digits in the month of february while the dow managed to stay slightly positive for the month. they weren't able to hold on to gains and clocked in their third negative month in a row. here's what's coming up in the second half of "fast money." warren buffett telling cnbc in an exclusive interview this morning that he's spending big bucks on some of his favorite stocks and the traders, they have got some suggestions on which ones he might want to buy. plus, starbucks making a big move into italy, but can the u.s. brand thrive in that market? we've put starbucks coffee up against little italy's coffee in a "fast money" report. the next guest says a select group of stocks has entered what
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he's calling a kill zone. let's go off the charts of carter worth. this sounds very scary, kill zone? >> when something throws back to level from which it broke and you're back to a good juncture and in written word we call that a kill zone. i have the s&p 500 and the etf that tracks momentum and this is 111 stocks representing 25% of the s&p, but what's key is when the market fails to make a new high the momentum index we know continued on to make a new high and then it tried to make a new high here but didn't so you have something of a double top, but a group that has led the market is now like the market thrown back a lot so here's the chart and the problem with this move is, it's an 11% move over the last week and a half. 50% more in the market and we know what we have as a clear break in trend and you have a nice trend line for the better
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part of two, three years. after a break a throwback to the underbelly that have line is a very difficult level, and it's not that the line is magic, it's that all the bodies, dead bodies who if given the chance want their money back, interested sellers above. all right. now, one of the things about this. these 120 names, $4.2 trillion. they are just starting to roll in aggregate. and they are big names. big, big popular, crowded and, quote, expensive names, if you will. so the issue here is that we're losing some of the -- some of the great players. if i were to do a chart of these five marquee names guess what it looks like it, looks an awful lot like the momentum index which we've say you've broken trend and you can draw a trend line or use an automated trend line, all that a moving average is but a throwback to that underbelly is a very tough juncture. we're sellers of these stocks
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and this theme. >> carter, i understand the stocks you're pinpointing right now. does a momentum index rebalance constantly show it becomes a moving indicator of sorts? >> sure. and it's winter bias, and what we do know is that the sheer ability to double or more compared to the market and to break more, meaning relative outperformance, relative underperformance on the way down and then the ricochet outpir formance, regardless of who is coming in and out. the way is lower here, and -- and they are very crowded names. >> all right. carter, thank you. >> so 25% of the s&p 500 in the kill zone. >> in the kill zone. >> yeah. >> and, you know, these are the names that everybody was in, starbucks. >> ant wanted to be in. >> and were working and worked very, very well. the right thing to be in them so now you're back at these levels when you say you know what, i should have gotten out some of that there. if the market starts to roll people will start taking profits on this. the one i would sell is home
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depot. >> no surprise that the kill zone is spoken by killjoy here. ultimately we have a case here. >> am i killjoy? >> i'm kidding. >> i'm a happy guy. >> the charts that carter pointed out, that's the outside of visa, five companies that i think people universally feel are on top of the game and gets back to multiples and companies. where do i want to own facebook? home dew point and starbucks are the two most defensive names and are as expensive because of the div and nothing slowing about the businesses. >> carter brings the heat on a monday. >> kill zone, i listen. >> put your little hand to your ear and listen on whoville people. i will say this. >> what does that mean? >> remember the grinch puts his hand to his ear and he listens. >> i think our the grinch that stole the market. >> home depot, look at the last quarter, home depot's quarters continue to improve and continue
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to maintain their mar jifnlts i know it's an expensive valuation. that's been an argument now for years. i think home depot is fine. >> at what point are you able to let go of valuation on a relative basis in the market seeing that a company is performing very well and executing very well, or never. >> probably never. just not my thing unless it's a deal stock. google is not crazy cheap, but i think the valuation is still attractive. that wasn't one of his names, know. >> from the kill zone to the must own, you may not realize this, but today is a leap year, and that only happens once every four years so to celebrate this very special day we're looking for the stocks that you could own for the next four years. tim, let's start off with you, what's your pick. >> four years is a long time and structurally industries changed dramatically. you could have picked some names that maybe people think are going to be decidedly different. google is a figure for four years because it's a proven --
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forget about the last four years, this company is so dramatically positioned for the next four years, search, digital media, where they are going with their special situations, a company on valuation that's very attractive for the growth that they are giving, almost 1-1. a company more transparent than ever and as an investor i'm link up with a company that knows what they will do for the next four years. >> bkers? >> for me it's all about yield. if i have to hold something for four years i want to have yield in this environment. i think the ten-year yield is probably going sub 1% so xlu is going to have a 3.5% dividend yield. >> karen? >> yeah. i like golar. they are in the business of doing long-term projects where they look in cash flow, and it's very out of favor right now because it -- it has an energy team to it but really these are -- you're making a bet about long-term projects with great
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counterparties, goalary. >> you know, it's funny. when i was in high school i had surgery and i was in high school for a while. >> it's not an excuse. >> come on. >> within a day. >> i got hooked on not "days of our lives" but "young and the restless." "y & r." >> whatever. >> when this was when you had your appendix out? >> my tonsils out. >> they had tv then. >> we're all done. >> get it out of your system. >> your pick? >> sjm, smuckers, you're out of your mind. look at how the stock has performed on what's been a dicy take. 20 times forward earnings, not crazy. diversified, three different groups. u.s. consumer, cove and pets and they have an international as well and their margins continue to improve. >> wow. >> sjm gets you done. >> got to be good, like schmuckers. >> still ahead, warren buffett telling cnbc he's aggressively buying this market and what name
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should you be doubling down on and starbucks heading to italy? our own italian stallion, guy adami, attesting to some of italy's finest brews. that's right after the break. >> that's fantastic.
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♪ >> welcome back to "fast money." starbucks is taking the plunge into the italian market saying it will open its first cafe in the city of milan by early next year, but can starbucks survive in a place where coffee is nearly its own religion? we wanted to find out so that means it's time for a taste test. we've got espresso from two different cafes from new york city's little italy and plus a shot of espresso from starbucks, mr. guy adami here who is of italian descent will take a sip of all three. >> half italian and hiflsy krillian, mel, here we go. >> okay, okay. >> you need a palate cleanser. >> starbucks, ferrara's, cafe
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aroma. >> slow down. >> w-r-o-n-g. >> this one is ferrara, this one is starbucks and this is caffe roma. >> you got one right. >> to be fair. i go doesn't regularly drink coffee. >> bailey wick. >> not like a chicken sandwich or hamburger. >> is guy still italian after that failing or starbucks actually going to kick it in milan which i think is the second? >> that was one of our more difficult taste tests. >> in fact -- >> maybe guys that watch "young and the restless" shouldn't be drinking espresso. >> trade coffee stocks here and starbucks is one of the four-year trade and sjm is another way to trade coffee. b.k.ers, where do you stand? >> i'd be a buyer of starbucks
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on a pull back. momentum stocks and valuation and don't want to bet against howard schultze and on pullbacks i'd be buying starbucks. >> timmy, wonder if you ought to go with mcdonald's? >> mccafe has been very good for these guys. i'm long starbucks. brian is saying ultimately you're in a place where you're pulling back and buy starbucks here, this is a great story which continues to reinvent new sales channels and trade at a premium and have just gone internationally and i think they can find ways to grow the company. this is a case where they have a great ceo and management continues to be ahead of the curve. >> all right. so guy -- >> do you know why he said that? >> i'm over here. >> hold on. hold hon. before the show we were talking about candy, and tim said he wanted me to start bringing
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peppermint patties. >> oh, right. >> and just to bail you out a little bit. >> sorry. >> now that you've failed the taste test, guy, in my book that's not getting it right so does that mean you think starbucks may have a better chance in italy? >> i think the italian culture will embrace starbucks. >> really? >> absolutely 100%, so they have more than a chance. i think they will do extraordinarily well in my home country. >> the places, they are written at the bottom of the cup, so when you were sipping, america could see if you're getting it wrong as it was happening. anyway. >> coming up. warren buffett telling cnbc today he's buying this mark. up next the traders tell you the four names they would buy out of buffet's portfolio right after the break. plus, we'll tell you why one obscure jewelry company is catching the eye of investors. stay tuned.
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you're watching "fast money" on cnbc, first in business worldwide. i appreciate you coming by. absolutely. the market's been pretty volatile lately. there is a lot at stake here, you know? look jim, we've been planning for this for a long time. and we'll keep evolving things. so don't worry. knowing what's on your mind and acting accordingly. multiplied by 13,000 financial advisors. it's a big deal. and it's how edward jones makes sense of investing.
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we're almost always a buyer of stocks and we're a more
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aggressive and i feel much better when they are going down, but it's hard to think of very many months when we haven't been a net buyer of stocks. >> welcome back to "fast." warren buffett on "squawk box" talking about how berkshire has been an aggressive buyer of stocks and some of their biggest holdings include wells fargo, coca-cola and kraft heinz and american expression. what's the one stock it owns that you would want as well? >> m ho ndalese. this is a company that's a global food company. we're seeing this and we saw it in 2014. a little expensive relative to itself and market expansion. this one is run as well as any company in the world and doing very well and these stocks have all been doing well. stay in this one. >> b.k.? >> for me it will go back to yield again so it will be at&t but i'd be like buffet buying it
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on a bull pc and feel better about buying it on the pullback. not only do i get yield is if things are slow and let's see about the slow economy, the last thing you do is cancel that cell phone bill and cancel your cell phone so this is almost kind of a consumer staple at this point. >> karen? >> yeah. verisign which you don't hear that much. owns about a billion worth of stock and they are in the domain name business. it's a great business. it's sticky and very asset-like and the return on capital is fantastic. all of those things that are sort of buffet-esque attributes and we own it. that would be bear time. >> to go back to the starbucks thing. >> okay. >> in order to succeed in italy, by the way, you can't be selling it in the paper cups. need a nice piece of china. >> legitimizing his italianness by coming up with that. >> i'm not legitimating it.
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when i go to the starbucks in italy, you know what i'm going to use to pay, my visa card, and that's the one you've got to follow mr. buffet into, letter "v." margins continue to improve. probably a little expensive, 22 times forward earnings and off to a rough start this year, but they process transactions. that business continues to grow. i think visa's the name. >> will they convert those to lires? >> and then the bitcoin and that's a whole different. >> yeah. also talked about ibm to becky this morning saying it could end up being a mistake that there's long-term holders and they have lost on paper to ibm. is that a stock you would pick up? >> no. >> you'd said buffet sell, sell, sell. >> that's the differ thing about this exercise. warren started the segment by saying we like to buy stocks on weakness and ibm is something he should be jumping in on and i don't think the transformation is anywhere near in place. i admire the way he buys stuff. buys great companies that will greet great value.
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ibm, not so sure. >> on ibm though, you have to believe in that turnaround and have to believe in the transition, and they have the pieces there. are i mean, if they can actually monetize watson, that's going to be the future of the company. they are involved in a lot of the company. they are very involved in block change which will be the next new technology so if you're warren buffett and have a 50-year time horizon, ibm may not be that bad. >> sold to everybody. >> that's what i thought you would say. >> we've been saying it now for a couple of years and here you are at 130 or 2 or whatever it is. people say it's cheap on valuation, but i believe watson might be great and they might figure out the block chain thing but those are years away. meantime, there's no growth there. >> now to today's -- one of today's big movers, signet jewellers had a rally that set off a flurry of rally activity buying kay and jared.
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hi, mike. >> saw more than 15 times the average call volume in signet today and one of the big trades that caused all the volume, likely a stock recovery play by one of the larger hedge fund holders in the stock. buying the march 115, 120, one by two call spread, ultimately traded 17,000 and 14,000 contracts respectively and that would be a stock recovery trade probably on 650,000 shares or more. basically this is a bullish bet, maximize your gains up around 120 and ultimately you would actually be called out of the stock around 125, up aroundy 20% from the current price. >> more "options action" check out full show 5:30 p.m. eastern time on friday. >> coming up next, the traders tell you what they are watching tomorrow right after this break. stay tuned. i'm here at the td ameritrade trader offices. steve, other than making me move stuff,
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what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.
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welcome back. earlier in the show we asked you guys on twitter if you agree with tom lee's call that the s&p would return to its old highs by may. nearly 800 of you voted and here's what you had to say. 33% said yes. 53% said no.
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14% said not sure. so 53%, the majority here, saying no. tom lee is wrong. we'll see. time now for the final trade. let's go around the horn. tim? >> brazil, which has been rallying up is up 22%, 23% and currency implied, something that continues to go higher but not straight higher. if you made this trade, take some profits here. >> should have had a twitter poll on tim's tie, by the way. >> isn't that fantastic? >> it's the combo. >> it's really fleeting edge, "days of our lives," by the way. >> b.k.? final trade? >> well, listen, you called me killjoy. final trade, a lot of talk about gold, but i think silver can outperform, slv, buy it. >> chairwoman? >> yeah, you know, if i like goalary for four years probably would like it starting today or tomorrow as well, so earnings out today. nicely done. cut the dividend. the street was expecting that. i like goalan. >> guy?
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>> marathon, mro, priced at a monster, secondary through morgan stanley and this might be the time to buy it on the news, mro. >> i'm melissa lee. thanks so much for watching. see you back here tomorrow at 5:00. don't go anywhere. "mad money" starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just tryinging to make you some money. my job isn't just to entertain but to coach and teach you. call me at 1-800-743-cnbc. or tweet me @jimcramer. politics is hurting your stocks. that's right. we pay less for stocks than we would otherwise because this


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